Amtek Said to Expand Asset Sale to Include All Overseas Unitsby and
Car-parts maker is seeking over $1 billion from sale
Company also considering sale of some units in India
Amtek Auto Ltd., the cash-strapped Indian car-parts maker, has expanded its planned asset sale to include additional overseas businesses as it looks to reduce leverage, people familiar with the matter said.
Amtek recently appointed Rothschild & Co. to advise on the potential sale of all overseas operations including those in the U.K., U.S., Mexico, China as well as Germany, the people said, asking not to be identified as the information is private. The New Delhi-based company has been seeking bidders for its German unit Amtek Tekfor Holding GmbH since last year.
The supplier to Ford Motor Co. and Aston Martin Holdings UK Ltd. expects to raise over $1 billion from the process, one of the people said. The company has talked to potential bidders from China, as well as private equity investors, the people said.
Amtek is pushing for additional asset sales as it contends with rising leverage and a net loss of 9.87 billion rupees ($147 million) reported for the fiscal year ending September. The company owed net debt of 147 billion rupees at the end of March this year, compared to 139 billion rupees in September 2015, according to a May 30 investor presentation.
Amtek’s shares rose as much as 8.7 percent, and were changing hands at 48.20 rupees at 2:23 p.m. in Mumbai. Metalyst Forgings Ltd., which is 49 percent owned by Amtek Auto, surged by the daily 20 percent limit to its highest price since December 2015. The stock soared 39 percent last week, the biggest weekly advance in more than a decade.
The components maker missed a September deadline to pay 8 billion rupees of bonds. Amtek would also be open to selling stakes in its overseas units should it fail to get attractive offers for the entire operations, the people said. The company is also weighing disposals of some of its Indian subsidiaries to decrease the debt burden, they said.
Amtek earlier appointed Morgan Stanley to advise on a debt-reduction plan, it said in November. Representatives for Amtek and Morgan Stanley didn’t respond to requests for comment, while Rothschild declined to comment in an e-mailed statement.
Amtek was seeking a valuation of $800 million for the Tekfor business in Germany, people familiar with the matter said last year. Amtek shortlisted two potential suitors for Tekfor and expects the sale to close in the next few months, according to the investor presentation.